This April, employers are seeing increases to statutory payments, the National Minimum Wage and Employment Tribunal awards.
Here, Jennifer Baxter explores the changes occurring this month and how they impact employers and their processes.
National Minimum Wage
As of 1 April 2024, the National Minimum Wage (NMW) increased.
The highest rate of NMW (known as the National Living Wage (NLW)) has been extended to those aged 21 years and over.
The new increased rates are as follows:
- 21 years old and over — £11.44 (9.8% increase) (NLW)
- 18–20 years old — £8.60 (14.8% increase)
- 16–17 years old — £6.40 (21.2% increase)
- Apprentice — £6.40 (21.2% increase)
- Accommodation offset — £9.99 (9.8% increase)
The Low Pay Commission (LPC) carried out a consultation on NMW rates in early 2023 and published its report in March 2024 which considered that the increase to £11.44 will meet the Government’s target for the National Living Wage to equal two-thirds of median earnings.
Businesses must ensure that payroll systems are updated to reflect the new rates of NMW. Underpayments — even accidental — could lead to claims from employees and an order to pay compensation, or even result in employers appearing on the Government’s name and shame list with reputational consequences.
Statutory Sick Pay
Statutory Sick Pay (SSP) is another benefit that has recently been announced as being on the rise. In November 2023, the Government confirmed that the weekly rate of SSP would increase from £109.40 to £116.75 per week which represents a 6.7% increase.
This increase will apply from 6 April 2024.
Statutory Maternity, Paternity, Adoption, Shared Parental and Parental Bereavement Pay
Statutory Maternity, Paternity, Adoption, Shared Parental and Parental Bereavement Pay will increase from 7 April 2024 from £172.48 to £184.03 per week. The employee will be entitled to the lesser of 90% of their average weekly earnings and the £172.48 figure.
That is with the exception of Statutory Maternity and Adoption Pay, where the 90% figure is guaranteed (where higher than the £184.03 figure) for the first six weeks.
The minimum average weekly earnings required to qualify for these family-related payments is to remain at £123.
Increases to Employment Tribunal awards
The maximum compensatory award for unfair dismissal cases will increase from £105,707 to £115,115 on 6 April 2024. The minimum basic award for certain unfair dismissals, such as health and safety dismissals, will also rise from £7,836 to £8,533. The new figures are based on the September 2023 Retail Prices Index (RPI) which represented an 8.9% increase on the previous year. For these new figures to apply, the effective date of termination must fall on or after 6 April 2024.
Additionally, for the purposes of calculating the basic award for unfair dismissal claims and statutory redundancy pay, the statutory limit on a week’s pay will increase from £643 to £700. This will take the maximum basic award for unfair dismissal, and the maximum statutory redundancy pay, up to £21,000.
Employment Tribunals can make awards for injury to feelings in discrimination and whistleblowing cases. The awards fall within three bands — low, middle and upper — (often known as the Vento bands after the case in which the three bands were first set out) depending upon how serious the Tribunal considers the injury to feelings to be.
For cases brought on or after 6 April 2024 the bands have increased, taking into account inflation, to:
- Lower — £1,200 to £11,700.
- Middle — £11,700 to £35,200.
- Upper — £35,200 to £58,700.
In the most exceptional cases, awards can be made in excess of £58,700.
Further changes in 2024
2024 will continue to see significant changes to employment law. Alongside the above increases to statutory payments there are also changes to the flexible working regime, the introduction of the Employment (Allocation of Tips) Act 2023 and significant changes to immigration law.
If you’d like to discuss how these changes will impact you or your organisation, talk to our experienced employment law team by completing the contact form below.
